How Progressive Corporatism Works
27th September 2008
Arnold Kling explains it all to you.
Even better than the distributed knowledge of professors is the distributed knowledge of markets. It is not just efficiency at issue. There is a fundamental moral issue. If my broker gives me bad market advice, I don’t have to take it. (Actually, I have never taken advice from a broker, and I never will.) But if Henry Paulson thinks that there is a profit opportunity in risky mortgage securities, I have no choice but to invest. Moreover, even though I think that Barney Frank’s affordable housing loans are bad for borrowers, bad for lenders and bad for the country, I am coerced into funding those loans.